# Revised OAR- SIM QUESTION! HELP NEEDED

ryannnnnnnnnnnnn
New MemberPosts:

**13**Registered
Hi,

Can some1 be able to help me with regards to answering the question

Basis Department A Department B

Supervisor Rates £20000 No Emplee £10000 £10000

Rates Rents £10000 Area 8000 2000

Labour Hours 1000 500

Machine Hours 50 1000

Furhter Info: The salary costs only realte to Department A. Department B is mainly machien based.

Requirement: Re-apportion the above rates on a more suitable basis and calculate OAR for each department.

Any help HUGELY grateful

Can some1 be able to help me with regards to answering the question

Basis Department A Department B

Supervisor Rates £20000 No Emplee £10000 £10000

Rates Rents £10000 Area 8000 2000

Labour Hours 1000 500

Machine Hours 50 1000

Furhter Info: The salary costs only realte to Department A. Department B is mainly machien based.

Requirement: Re-apportion the above rates on a more suitable basis and calculate OAR for each department.

Any help HUGELY grateful

## Comments

207RegisteredDept A Dept B Total

Supervisor Wages 10000 10000 20000

Rent & Rates 5000 5000 10000

Totals 15000 15000 30000

Re -Apportion Wages 20000 0 20000

Re-Apportion Rent & Rates 8000 2000 10000

Total Costs 28000 2000 30000

207RegisteredDept A Dept B Total

Supervisor Wages 10000 10000 20000

Rent & Rates 8000 2000 10000

Totals 18000 12000 30000

_____________________________

Re -Apportion Wages 20000 0 20000

Re-Apportion Rent & Rates 8000 2000 10000

Total Costs 28000 2000 30000

This is what i have come up with, but the question you are asking isnt clear?

Are we treating Labour and Rent seperately?

I would presume we treat them as a total figure, therefore:

Dept A = 28,000/Labour Hrs 1,500 = £18.66 OAR as more labour is carried out in that Dept.

Dept B = 2,000/1,050 Mach Hrs = £19.05 OAR as this dept mainly uses Machines.

Also above i have Apportioned Rent & Rates as Follows:

£10,000 / 1,000 (Floor Area) = £10

£10 x 800 (Floor area A) = 8,000

£10 x 200 (Floor Area = 2,000

I hope this is right.

As the question was a bit unclear i have presumed the above to be the most obvious assumptions.

13Registered207RegisteredI would presume the above unless anyone has got a better answer.